Energy Market Analysis - 20-03-2013

Yesterday focused on the colder weather and low storage levels, both adding pressure to spot and near curve prices. UK NTS demand is expected to be 4mm cm higher today, which will put even more pressure on our depleting gas storage. Temperatures are still set to be below average over the next week, strengthening April 13 prices. As well as the weather, lower renewable production from Germany has held up the spot power prices with mixed sentiment on the far curve.

How did the energy markets close?

Despite a long system, the day-ahead price rose over 3ppt. As stated above, the colder weather and low storage levels are both supporting near curve prices. Day-ahead power price rose £1.00/MWh following heavy trading, seeing an intraday high of £52.55/MWh.

How did the energy markets open?

Day-ahead gas was on the rise this morning, opening up 5ppt higher than Tuesday's closing price, with UK storage levels now less than 10% full. Power followed gas this morning opening up £6.50/MWh higher, with little impact from the falling coal price (-$3/tn). In other news, the Energy Secretary has approved a new nuclear reactor at Hinckley. This will be the first nuclear reactor built in the UK since 1988.

1-year forward prices

1-year forward prices seem to following the direction of day-ahead/near curve prices with gas now trading at 69.13ppt and power at £52.73/MWh, increases of 0.31ppt and £0.20/MWh respectively.

Latest Brent Crude Oil prices

Brent oil dropped $2.06/b following uncertainty in Cyprus, but has since rebounded this morning following optimistic financial markets. Note: Brent Crude prices are taken from opening market data, and do not represent the price as it changes throughout the day.